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26 October, 22:06

Find the amount to which $550 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.

(A) 9% compounded annually for 5 years.

(B) 9% compounded semiannually for 5 years.

(C) 9% compounded quarterly for 5 years.

(D) 9% compounded monthly for 5 years.

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  1. 26 October, 22:18
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    (A) Fv = $864.2

    (B) Fv = $1302.05

    (C) Fv = $2003.4

    (D) Fv = $96817.21

    Explanation:

    Giving the following information:

    Initial investment = $550

    We will use the final value formula:

    FV=Present value * (1+i) ^n

    (A) 9% compounded annually for 5 years.

    Fv = 550 * (1.09) ^5=$864.2

    (B) 9% compounded semiannually for 5 years.

    Fv = 550 * (1.09) ^10 = $1302.05

    (C) 9% compounded quarterly for 5 years.

    Fv = 550 * (1.09) ^15 = $2003.4

    (D) 9% compounded monthly for 5 years.

    Fv = 550 * (1.09) ^60=$96817.21
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